The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas would benefit the most out of four Caribbean countries from starting a direct flight between Nassau and the Brazilian city of Sao Paolo, an Inter-American Development Bank (IDB) report has suggested.

The report, part of a wider IDB effort to encourage the Bahamas and other Caribbean nations to diversify their tourism source markets into Latin America, based its findings on a hypothetical, once a week 220-seat jet service generating 11,000 arrivals per year.

Allowing for $1 million in marketing costs, plus advertising and seat guarantee expenses, the IDB report found that the Bahamas - because it did not offer such guarantees - would fare better than Barbados, Jamaica and Trinidad in terms of economic boost.

The report said that, assuming 90 per cent load factors in the tourism high season, and 65 per cent at the calendar’s low point, the Bahamas would see a net $4.105 million return - equivalent to 0.31 per cent of GDP.

“Break-even is around 65 per cent [load factors] for all countries except for the Bahamas, where break even is 14 per cent,” the IDB said.

“This is because of the absence of a guarantee and relatively high tourism taxes in the Bahamas.

“If the utilisation of the planes is lower, then all countries except the Bahamas would have a fiscal loss. However, the net cost to the Government would still lead to increases in GDP by a factor of 6–12 times in dollar terms or 0.09–0.47 percentage points of GDP.”